Business Opportunities in India

Friday, August 21, 2009

The retail business in India is witnessing resurgence with novel ideas like revenue-sharing with realtors coming into prominence. The India advantage still holds in terms of lowered real estate prices helping retailers to consolidate their businesses. Several government policies released in the recent past is helping companies to push growth into positive territory.

Spencer’s, the retail arm of the Rs 15,000-crore RPG Enterprises, is pumping in Rs 100 crore to open 10 to 12 large format stores across the country during 2009-10. “These stores would be hypermarts and supermarts of the size of 10,000 sq ft to 30,000 sq ft and would be located in Chennai, Bangalore, Andhra Pradesh, Kolkata and NCR," said Sanjiv Goenka, vice-chairman of RPG Enterprises. For Spencer's too, Goenka is exploring the option of revenue-sharing model with realty owners for its new stores.

Future Group subsidiary Pantaloon Retail is planning a special purpose vehicle (SPV) to raise up to Rs 500 crore by offloading its non-core assets and is hoping to ensure that its restructuring plans are compliant with foreign direct investment (FDI) policy guidelines. At present, FDI is prohibited in multi-brand retailing, and only 51 per cent FDI is allowed in single-brand stores.

Watch and jewellery retailer, Titan Industries, is scaling up its retail operations to step up its retail presence. It plans to add 40 World of Titan stores across India by the end of 2009-10. It has lined up a slew of marketing initiatives to boost sales, which include 'Titan Exchange Offer 2009'.

AVG Technologies, global anti-virus maker, too is making its various anti-virus suites in several large format retail stores in India. Operating in India through its master distributor, Milestone Interactive, AVG products will now be available at retail outlets such as Croma, HyperCITY, Reliance Digital, jay Sales, Landmark and P3.

Industrial and manufacturing output improving the economic climate in June 2009 has helped overcome the effects of drought, according to the Finance Minister. This has resulted in improved retail sales and performance of several majors.

Thursday, July 9, 2009

The Indian fast-moving consumer goods industry, consumer durables and automobiles have responded positively to the sops offered by the Finance Minister, Mr Pranab Mukherjee in the budget for 2009-10. The very nature of the measures taken such as implementation of goods and services tax (GST), removal of excise duty cuts etc. is proving to be favourable for these industries and the indices too shot up indicating improved sentiment.

Overall, these sectors reflect the socio-economic conditions in the country the most. With rural spending increasing both by the government and individuals, these sectors are likely to experience growth in the range of 10-18 per cent in the coming years and increase four times over in the next 10 years according to a recent industry research report.

Amit Burman, Vice Chairman, Dabur India, agrees: "Rural India accounts for almost 40 per cent of the industry’s sales. The government’s decision to extend the loan waiver scheme in view of the delay in monsoons and offer subsidised loans (at 6 per cent) for farmers who have paid their dues in time would put more money in their pockets. This move would go a long way in giving the rural economy and consumerism a big boost."

According to M. S. Banga, president (Foods, HPC) of consumer products giant Unilever, the government's focus on stimulating rural demand and all the measures to put money in the hands of consumers will go a long way. "We are doing well as a nation and from here on, we can only look upwards. Consumption-led focus is a great way to get going. We must remember not many geographies are seeing the kind of growth which we are seeing," said Mr Banga.

Consumer electronic majors, such as LG, Samsung, Godrej and Philips, also expect their businesses to strengthen. These companies are working out strategies and products specifically addressing the market, apart from focussing on adding strength to their distribution network there. Samsung plans to expand its sales channel by 25-30 per cent in rural India. Meanwhile, LG has outlined plans to invest around US$ 40 million towards development of entry-level products targeted at rural markets.

Presently, the urban markets account for around 50 per cent of sales in the Rs 25,000-crore consumer electronics industry, tier-II and -III towns for 30 per cent from and rural India for the balance 20 per cent.

No wonder, the consumers are all out to buy and buy more, and enjoy spending for a change.

Wednesday, July 1, 2009

Current events and happenings in the country are leading us to believe that a recovery of sorts is occurring, boosting the economic morale in India.

Amongst the various Indian industries that have been successful in bucking the global contagion and are showing good numbers are the Indian telecom, banking and biotechnology sectors. The country added over 8 million subscribers during May 2009, taking the total GSM subscriber base to over 30 million, registering a growth of 2.78 per cent. The country’s largest telecom operator, Bharti Airtel that reached the 100 million subscriber mark (fixed line and wireless) achieved a 2.91 per cent growth in its wireless subscriber’s base taking its total wireless subscribers’ count to 99.5 million. Vodafone-Essar, the second largest GSM operator in the country registered a 3.55 per cent growth in its subscriber market share, adding further 2.5 million subscribers.

The banking sector especially public sector banks did well enough to garner ample credit and deposits on the back of increased economic and robust market activity. In 2008-09, total advances grew at 17.3 per cent while total deposits grew by 19.8 per cent. Spending on infrastructure and the new fiscal reforms are likely to propel further growth.

Mr. Philip Kendall, Senior Sector Manager (International Biotech and Pharma) with the United Kingdom Trade and Investment arm recently observed, “India has a relatively young biotech sector and all the ingredients for growth, such as quality services and businesses”. This is indicative of the milestones that the biotech industry has begun to achieve, what with US-based and European biotech companies wanting a pie in the sector to not only grow but to also buck globally difficult times.

The textile industry has in the meanwhile found a savior in form of the newly inducted textiles Minister, Mr. Dayanidhi Maran, who stated that “considering the current developments and technological advancement, it is crucial to evolve a National Fiber Policy. My priority is to get some relief for the industry in the short term. Once the industry picks up, the rest will fall in place.”

The perfume industry is witnessing an upheaval with the entry of Giorgio Armani, one of the top luxury apparel and accessories brands, which recently launched its first ever ‘super-luxury’ range of Prive perfumes in India in collaboration with L’Oreal International. It is scheduled to open 10 outlets offering perfumes in the luxury segment across Delhi, Mumbai and Bangalore out of which six will come up by May end. The company will be selling a wide range of eighty fragrances except for its super premium Prive range in Lifestyle and Shopper’s Stop stores.

Wednesday, April 8, 2009

Prime Minister Dr Manmohan Singh was back from the G-20 summit held at London recently with a smile. The outcome has been satisfactory, he said. President Obama, in his meeting with the PM, had credited Dr Singh with India’s growing financial stature in the world economy. Obama described the PM as a "wise and marvellous" man at an individual conference. President Obama even hailed India's "high stature" because it had "unleashed economic forces" and said a lot of it had to do with "the wisdom of Dr Singh".Dr Singh’s efforts along with the other leaders at improving the economic climate seem to be paying off. According to Dr Singh, India too had provided a fiscal stimulus of about four percent of its GDP ie., approx. Rs 1,20,000 crore in 2008-09. This will help the country's growth rate to reach a little less than seven per cent, comparatively higher than most other economies. "We hope to be able to achieve a similar growth rate in 2009-10, with continuing reliance on monetary and fiscal policy. Active contra-cyclical policy must be a priority item on our agenda and global markets are looking to see if we are united on this issue," he said.The agenda at the summit concluded with pumping of US$ 1.1 trillion into International Monetary Fund for providing stimulus for the revival of world business, removal of protectionist measures raids on tax havens and strengthening the global financial system through supervision.Dr Singh reaffirmed India’s commitment to the said agenda and promised that more free trade agreements would be arrived at with countries. This would facilitate setting up of businesses in India and thereby improve the foreign direct investment flows. Recent industry research by IDC too reveals the growing optimism of Indian Chief Information Officers (CIOs) on bucking the economic slowdown and rejuvenating the economy earlier than anticipated.

Monday, June 2, 2008

It’s official! India is happening. With an economy growing at the rate of 9 per cent, business opportunities in India are increasing more than ever before. So much, so that Investors around the world are making a beeline for doing business in India. The FDI Confidence Index 2007 by A T Kearney shows India as second most attractive destinations for foreign direct investment.

Obviously, opening up of the market in the beginning of the nineties is paying dividends. Higher income generated at the bottom of the pyramid has fuelled the high octane growth of business opportunities in India across all sectors.

Lion’s share of the business opportunities in India exists in the knowledge intensive industries like, Information Technology. Its enormous talent pool available at a reasonably low cost helps India to edge out the competition. According to a NASSCOM-Deloitte study, this sector has contributed 5.2 per cent of India’s GDP in 2007.

Some other sectors that offer maximum business opportunities in India are:

Telecom: Five leading telecom companies in the world have already invested large amounts to cash in the business opportunities in India’s telecom market. The sheer population of India reflects the growth potential of the segment.

Oil and Gas: With a 25-50 per cent lower capital cost alongside the strategic location on the route of Middle East crude for East Asian and Pacific-rim markets India is fast emerging as the global hub for oil refining.

Infrastructure: Growing at a rate of 8.6 per cent (2006-7), this segment offers tremendous business opportunities in India.

Retail: India tops the AT Kearney's annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment.

Apart from the above, huge business opportunities in India lie the sectors like, financial services, healthcare and real estate.

In the post reforms period, setting up a business in India, is not a worry at all. The elimination of license raj has been able to cut off bureaucratic red tape to much extent. The liberal regime has shaped up an investor friendly economic climate over the years.